Lead-free perovskite CsEuBr3 has recently attracted attention for its potential in blue-light applications, yet its specific electronic and excitonic behaviors have lacked detailed theoretical exploration. To address this, we investigated the material’s spin-polarized electronic structure and optical properties using Density Functional Theory plus U (DFT + U, U = 6.1 eV) combined with the GW approximation and Bethe-Salpeter equation (BSE). Our calculations for the Pnma phase yielded lattice constants (a = 8.33 Å, b = 8.44 Å, c = 11.94 Å) that align closely with experimental benchmarks. The DFT + U analysis indicates a direct spin-up band gap of 2.87 eV at the Γ-point, originating from Eu 4f-5d transitions, whereas the spin-down channel exhibits a much wider gap of 4.54 eV. Furthermore, many-body GW + BSE calculations reveal a strong exciton peak at 2.7 eV with a binding energy near 100 meV, which is consistent with the experimentally reported blue emission at ~ 2.77 eV. Additionally, a computationally spurious sub-gap feature at ~ 0.5 eV is critically evaluated and attributed to the over-binding effect of the static BSE kernel on highly localized 4f states. Overall, these results underscore the importance of electron-hole correlations and localized Eu-4f states in driving strong excitonic emission, confirming CsEuBr3 as a viable, eco-friendly candidate for optoelectronics.